UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One) | |
☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
| |
For the quarterly period ended | |
OR | |
☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
| |
For the transition period from _____________ to ____________ |
Commission File No. 000-28837001-41320
IDAHO STRATEGIC RESOURCES, INC |
(Name of small business issuer in its charter) |
Idaho |
| 82-0490295 |
(State or other jurisdiction of incorporation or organization) |
| (I.R.S. employer identification No.) |
201 N. Third Street, Coeur d’Alene, ID 83814
(Address of principal executive offices) (zip code)
(208) 625-9001
Registrant’s telephone number, including area code
Securities registered pursuant to Section 12(g)12(b) of the Act:
Title of Each Class | Trading Symbol(s) | Name of Each Exchange on Which Registered |
Common Stock, $0.00 par value | IDR | NYSE American |
Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.Yesdays. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act:
Large Accelerated Filer | ☐ | Accelerated Filer | ☐ |
Non-Accelerated Filer | ☒ | Small Reporting Company | ☒ |
|
| Emerging Growth Company | ☐ |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicated by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act): Yes ☐ No ☒
APPLICABLE ONLY TO CORPORATE ISSUERS:
At NovemberMay 1, 2023, 12,256,5232024, 12,740,362 shares of the registrant’s common stock were outstanding.
IDAHO STRATEGIC RESOURCES, INC
QUARTERLY REPORT ON FORM 10-Q
FOR THE QUARTERLY PERIOD
ENDED SEPTEMBER 30, 2023MARCH 31, 2024
TABLE OF CONTENTS
3 | ||||
3 | ||||
Management’s Discussion and Analysis of | 13 | |||
16 | ||||
16 | ||||
17 | ||||
17 | ||||
17 | ||||
17 | ||||
17 | ||||
17 | ||||
18 |
2 |
Table of Contents |
PART I - FINANCIAL INFORMATION
ITEM 1: FINANCIAL STATEMENTSFinancial Statements
Idaho Strategic Resources, Inc. Condensed Consolidated Balance Sheets (Unaudited)
| ||||||||
|
| September 30, 2023 |
|
| December 31, 2022 |
| ||
ASSETS |
|
|
|
|
|
| ||
Current assets: |
|
|
|
|
|
| ||
Cash and cash equivalents |
| $ | 1,971,845 |
|
| $ | 1,638,031 |
|
Gold sales receivable |
|
| 1,127,604 |
|
|
| 909,997 |
|
Inventories |
|
| 701,493 |
|
|
| 618,313 |
|
Joint venture receivable |
|
| 1,637 |
|
|
| 1,926 |
|
Investment in equity securities |
|
| 6,677 |
|
|
| - |
|
Other current assets |
|
| 333,459 |
|
|
| 192,025 |
|
Total current assets |
|
| 4,142,715 |
|
|
| 3,360,292 |
|
|
|
|
|
|
|
|
|
|
Property, plant and equipment, net of accumulated depreciation |
|
| 10,554,522 |
|
|
| 9,923,386 |
|
Mineral properties, net of accumulated amortization |
|
| 7,154,092 |
|
|
| 6,527,561 |
|
Investment in Buckskin Gold and Silver |
|
| 337,217 |
|
|
| 334,252 |
|
Investment in joint venture |
|
| 435,000 |
|
|
| 435,000 |
|
Reclamation bond |
|
| 251,310 |
|
|
| 327,020 |
|
Deposits |
|
| 25,000 |
|
|
| 76,110 |
|
Total assets |
| $ | 22,899,856 |
|
| $ | 20,983,621 |
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
|
Accounts payable and accrued expenses |
| $ | 498,374 |
|
| $ | 579,541 |
|
Accrued payroll and related payroll expenses |
|
| 253,696 |
|
|
| 179,149 |
|
Note payable related parties, current portion |
|
| - |
|
|
| 12,226 |
|
Notes payable, current portion |
|
| 1,007,101 |
|
|
| 859,393 |
|
Total current liabilities |
|
| 1,759,171 |
|
|
| 1,630,309 |
|
|
|
|
|
|
|
|
|
|
Asset retirement obligation |
|
| 274,091 |
|
|
| 262,217 |
|
Note payable related parties, long term |
|
| - |
|
|
| 62,957 |
|
Notes payable, long term |
|
| 1,511,383 |
|
|
| 1,315,068 |
|
Total long-term liabilities |
|
| 1,785,474 |
|
|
| 1,640,242 |
|
|
|
|
|
|
|
|
|
|
Total liabilities |
|
| 3,544,645 |
|
|
| 3,270,551 |
|
|
|
|
|
|
|
|
|
|
Commitments (Note 11) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders’ equity: |
|
|
|
|
|
|
|
|
Preferred stock, no par value, 1,000,000 shares authorized; no shares issued or outstanding |
|
| - |
|
|
| - |
|
Common stock, no par value, 200,000,000 shares authorized; September 30, 2023-12,256,523 and December 31, 2022- 12,098,070 shares issued and outstanding |
|
| 34,124,125 |
|
|
| 33,245,622 |
|
Accumulated deficit |
|
| (17,559,313 | ) |
|
| (18,368,384 | ) |
Total Idaho Strategic Resources, Inc stockholders’ equity |
|
| 16,564,812 |
|
|
| 14,877,238 |
|
Non-controlling interest |
|
| 2,790,399 |
|
|
| 2,835,832 |
|
Total stockholders' equity |
|
| 19,355,211 |
|
|
| 17,713,070 |
|
|
|
|
|
|
|
|
|
|
Total liabilities and stockholders’ equity |
| $ | 22,899,856 |
|
| $ | 20,983,621 |
|
Idaho Strategic Resources, Inc.
Condensed Consolidated Balance Sheets (Unaudited)
|
| March 31, 2024 |
|
| December 31, 2023 |
| ||
ASSETS |
|
|
|
|
|
| ||
Current assets: |
|
|
|
|
|
| ||
Cash and cash equivalents |
| $ | 5,295,457 |
|
| $ | 2,286,999 |
|
Gold sales receivable |
|
| 1,238,474 |
|
|
| 1,038,867 |
|
Inventories |
|
| 796,836 |
|
|
| 876,681 |
|
Joint venture receivable |
|
| 1,598 |
|
|
| 2,080 |
|
Investment in equity securities |
|
| - |
|
|
| 5,649 |
|
Other current assets |
|
| 209,824 |
|
|
| 236,837 |
|
Total current assets |
|
| 7,542,189 |
|
|
| 4,447,113 |
|
|
|
|
|
|
|
|
|
|
Property, plant and equipment, net of accumulated depreciation |
|
| 10,665,673 |
|
|
| 10,233,640 |
|
Mineral properties, net of accumulated amortization |
|
| 9,088,070 |
|
|
| 7,898,878 |
|
Investment in Buckskin Gold and Silver, Inc |
|
| 340,636 |
|
|
| 338,769 |
|
Investment in joint venture |
|
| 435,000 |
|
|
| 435,000 |
|
Reclamation bond |
|
| 251,310 |
|
|
| 251,310 |
|
Deposits |
|
| 377,420 |
|
|
| 285,079 |
|
Total assets |
| $ | 28,700,298 |
|
| $ | 23,889,789 |
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
|
Accounts payable and accrued expenses |
| $ | 485,363 |
|
| $ | 484,221 |
|
Accrued payroll and related payroll expenses |
|
| 272,476 |
|
|
| 266,670 |
|
Notes payable, current portion |
|
| 1,090,329 |
|
|
| 978,246 |
|
Total current liabilities |
|
| 1,848,168 |
|
|
| 1,729,137 |
|
|
|
|
|
|
|
|
|
|
Asset retirement obligations |
|
| 291,223 |
|
|
| 286,648 |
|
Notes payable, long term |
|
| 2,167,060 |
|
|
| 1,338,406 |
|
Total long-term liabilities |
|
| 2,458,283 |
|
|
| 1,625,054 |
|
|
|
|
|
|
|
|
|
|
Total liabilities |
|
| 4,306,451 |
|
|
| 3,354,191 |
|
|
|
|
|
|
|
|
|
|
Commitments |
|
| - |
|
|
| - |
|
|
|
|
|
|
|
|
|
|
Stockholders’ equity: |
|
|
|
|
|
|
|
|
Preferred stock, no par value, 1,000,000 shares authorized; no shares issued or outstanding |
|
| - |
|
|
| - |
|
Common stock, no par value, 200,000,000 shares authorized; March 31, 2024-12,683,037 and December 31, 2023- 12,397,615 shares issued and outstanding |
|
| 36,664,576 |
|
|
| 34,963,739 |
|
Accumulated deficit |
|
| (15,039,529 | ) |
|
| (17,210,638 | ) |
Total Idaho Strategic Resources, Inc stockholders’ equity |
|
| 21,625,047 |
|
|
| 17,753,101 |
|
Non-controlling interest |
|
| 2,768,800 |
|
|
| 2,782,497 |
|
Total stockholders' equity |
|
| 24,393,847 |
|
|
| 20,535,598 |
|
|
|
|
|
|
|
|
|
|
Total liabilities and stockholders’ equity |
| $ | 28,700,298 |
|
| $ | 23,889,789 |
|
The accompanying notes are an integral part of these condensed consolidated financial statements.
3 |
Table of Contents |
Idaho Strategic Resources, Inc. Condensed Consolidated Statements of Operations (Unaudited) For the Three and Nine-Month Periods Ended September 30, 2023 and 2022
| ||||||||||||||||
|
| September 30, 2023 |
|
| September 30, 2022 |
| ||||||||||
|
| Three Months |
|
| Nine Months |
|
| Three Months |
|
| Nine Months |
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Revenue: |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Sales of products |
| $ | 3,301,221 |
|
| $ | 9,879,332 |
|
| $ | 1,745,278 |
|
| $ | 6,148,187 |
|
Total revenue |
|
| 3,301,221 |
|
|
| 9,879,332 |
|
|
| 1,745,278 |
|
|
| 6,148,187 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs of Sales: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of sales and other direct production costs |
|
| 1,831,847 |
|
|
| 6,079,697 |
|
|
| 1,728,214 |
|
|
| 5,345,409 |
|
Depreciation and amortization |
|
| 363,442 |
|
|
| 1,034,521 |
|
|
| 245,824 |
|
|
| 717,939 |
|
Total costs of sales |
|
| 2,195,289 |
|
|
| 7,114,218 |
|
|
| 1,974,038 |
|
|
| 6,063,348 |
|
Gross profit (loss) |
|
| 1,105,932 |
|
|
| 2,765,114 |
|
|
| (228,760 | ) |
|
| 84,839 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exploration |
|
| 435,439 |
|
|
| 916,250 |
|
|
| 747,217 |
|
|
| 1,530,122 |
|
Management |
|
| 58,998 |
|
|
| 183,477 |
|
|
| 158,625 |
|
|
| 266,998 |
|
Professional services |
|
| 80,856 |
|
|
| 444,899 |
|
|
| 85,429 |
|
|
| 301,446 |
|
General and administrative |
|
| 117,178 |
|
|
| 504,241 |
|
|
| 603,274 |
|
|
| 1,078,563 |
|
(Gain) loss on disposal of equipment |
|
| - |
|
|
| (224 | ) |
|
| 64,739 |
|
|
| 68,641 |
|
Total other operating expenses |
|
| 692,471 |
|
|
| 2,048,643 |
|
|
| 1,659,284 |
|
|
| 3,245,770 |
|
Operating income (loss) |
|
| 413,461 |
|
|
| 716,471 |
|
|
| (1,888,044 | ) |
|
| (3,160,931 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other (income) expense: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity income on investment in Buckskin |
|
| (1,608 | ) |
|
| (2,965 | ) |
|
| (542 | ) |
|
| (1,213 | ) |
Timber revenue net of costs |
|
| - |
|
|
| (20,724 | ) |
|
| - |
|
|
| - |
|
Gain on forgiveness of SBA loan |
|
| - |
|
|
| - |
|
|
| - |
|
|
| (10,000 | ) |
Loss on investment in equity securities |
|
| 1,543 |
|
|
| 4,423 |
|
|
| - |
|
|
| - |
|
Interest income |
|
| (23,560 | ) |
|
| (61,253 | ) |
|
| (322 | ) |
|
| (878 | ) |
Interest expense |
|
| 33,103 |
|
|
| 52,999 |
|
|
| 22,244 |
|
|
| 85,902 |
|
Total other (income) expense |
|
| 9,478 |
|
|
| (27,520 | ) |
|
| 21,380 |
|
|
| 73,811 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) |
|
| 403,983 |
|
|
| 743,991 |
|
|
| (1,909,424 | ) |
|
| (3,234,742 | ) |
Net loss attributable to non-controlling interest |
|
| (16,696 | ) |
|
| (65,080 | ) |
|
| (15,005 | ) |
|
| (66,123 | ) |
Net income (loss) attributable to Idaho Strategic Resources, Inc. |
| $ | 420,679 |
|
| $ | 809,071 |
|
| $ | (1,894,419 | ) |
| $ | (3,168,619 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) per common share-basic |
| $ | 0.03 |
|
| $ | 0.07 |
|
| $ | (0.16 | ) |
| $ | (0.27 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common share outstanding-basic |
|
| 12,256,523 |
|
|
| 12,238,172 |
|
|
| 12,032,901 |
|
|
| 11,677,167 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) per common share-diluted |
| $ | 0.03 |
|
| $ | 0.07 |
|
| $ | (0.16 | ) |
| $ | (0.27 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding- diluted |
|
| 12,263,318 |
|
|
| 12,243,055 |
|
|
| 12,032,901 |
|
|
| 11,677,167 |
|
Idaho Strategic Resources, Inc.
Condensed Consolidated Statements of Operations (Unaudited)
For the Three-Month Periods Ended March 31, 2024 and 2023
|
| March 31, |
| |||||
|
| 2024 |
|
| 2023 |
| ||
|
|
|
|
|
|
| ||
Revenue: |
|
|
|
|
|
| ||
Sales of products |
| $ | 5,898,938 |
|
| $ | 3,341,596 |
|
Total revenue |
|
| 5,898,938 |
|
|
| 3,341,596 |
|
|
|
|
|
|
|
|
|
|
Costs of Sales: |
|
|
|
|
|
|
|
|
Cost of sales and other direct production costs |
|
| 2,558,913 |
|
|
| 2,147,960 |
|
Depreciation and amortization |
|
| 501,788 |
|
|
| 328,037 |
|
Total costs of sales |
|
| 3,060,701 |
|
|
| 2,475,997 |
|
Gross profit |
|
| 2,838,237 |
|
|
| 865,599 |
|
|
|
|
|
|
|
|
|
|
Other operating expenses: |
|
|
|
|
|
|
|
|
Exploration |
|
| 267,848 |
|
|
| 273,442 |
|
Management |
|
| 109,100 |
|
|
| 68,911 |
|
Professional services |
|
| 154,244 |
|
|
| 240,805 |
|
General and administrative |
|
| 160,663 |
|
|
| 263,298 |
|
Loss on disposal of equipment |
|
| 4,409 |
|
|
| 6,120 |
|
Total other operating expenses |
|
| 696,264 |
|
|
| 852,576 |
|
Operating income |
|
| 2,141,973 |
|
|
| 13,023 |
|
|
|
|
|
|
|
|
|
|
Other (income) expense: |
|
|
|
|
|
|
|
|
Equity income on investment in Buckskin Gold and Silver, Inc |
|
| (1,867 | ) |
|
| (350 | ) |
Timber revenue net of costs |
|
| (13,357 | ) |
|
| (20,724 | ) |
(Gain) loss on investment in equity securities |
|
| 453 |
|
|
| (5 | ) |
Interest income |
|
| (19,635 | ) |
|
| (18,932 | ) |
Interest expense |
|
| 20,565 |
|
|
| 8,848 |
|
Total other (income) expense |
|
| (13,841 | ) |
|
| (31,163 | ) |
|
|
|
|
|
|
|
|
|
Net income |
|
| 2,155,814 |
|
|
| 44,186 |
|
Net loss attributable to non-controlling interest |
|
| (15,295 | ) |
|
| (16,413 | ) |
Net income attributable to Idaho Strategic Resources, Inc |
| $ | 2,171,109 |
|
| $ | 60,599 |
|
|
|
|
|
|
|
|
|
|
Net income per common share-basic |
| $ | 0.17 |
|
| $ | 0.01 |
|
|
|
|
|
|
|
|
|
|
Weighted average common share outstanding-basic |
|
| 12,513,374 |
|
|
| 12,200,857 |
|
|
|
|
|
|
|
|
|
|
Net income per common share-diluted |
| $ | 0.17 |
|
| $ | 0.01 |
|
|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding-diluted |
|
| 12,673,172 |
|
|
| 12,205,567 |
|
The accompanying notes are an integral part of these condensed consolidated financial statements.
4 |
Table of Contents |
Idaho Strategic Resources, Inc. Condensed Consolidated Statement of Changes in Stockholders' Equity (Unaudited) For the Three and Nine-Month Periods Ended September 30, 2023 and 2022
| ||||||||||||||||||||
|
| Common Stock Shares |
|
| Common Stock Amount |
|
| Accumulated Deficit Attributable to Idaho Strategic Resources, Inc |
|
| Non-Controlling Interest |
|
| Total Stockholders’ Equity |
| |||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Balance January 1, 2022 |
|
| 10,940,969 |
|
| $ | 26,004,756 |
|
| $ | (15,832,955 | ) |
| $ | 2,892,001 |
|
| $ | 13,063,802 |
|
Contribution from non-controlling interest in New Jersey Mill Joint Venture |
|
| - |
|
|
| - |
|
|
| - |
|
|
| 2,828 |
|
|
| 2,828 |
|
Issuance of common stock for cash, net of offering costs |
|
| 360,134 |
|
|
| 2,701,000 |
|
|
| - |
|
|
| - |
|
|
| 2,701,000 |
|
Issuance of common stock for services |
|
| 3,572 |
|
|
| 32,326 |
|
|
| - |
|
|
| - |
|
|
| 32,326 |
|
Issuance of common stock for warrants exercised |
|
| 23,057 |
|
|
| 68,006 |
|
|
| - |
|
|
| - |
|
|
| 68,006 |
|
Issuance of common stock for cashless option exercise |
|
| 28,981 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
Conversion of convertible debt to common stock |
|
| 392,866 |
|
|
| 1,950,000 |
|
|
| - |
|
|
| - |
|
|
| 1,950,000 |
|
Net loss |
|
| - |
|
|
| - |
|
|
| (455,602 | ) |
|
| (17,467 | ) |
|
| (473,069 | ) |
Balance March 31, 2022 |
|
| 11,749,579 |
|
|
| 30,756,088 |
|
|
| (16,288,557 | ) |
|
| 2,877,362 |
|
|
| 17,344,893 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contribution from non-controlling interest in New Jersey Mill Joint Venture |
|
| - |
|
|
| - |
|
|
| - |
|
|
| 18,202 |
|
|
| 18,202 |
|
Issuance of common stock for cash, net of offering costs |
|
| 138,665 |
|
|
| 980,107 |
|
|
| - |
|
|
| - |
|
|
| 980,107 |
|
Issuance of common stock for warrants exercised |
|
| 70,919 |
|
|
| 397,147 |
|
|
| - |
|
|
| - |
|
|
| 397,147 |
|
Issuance of common stock for cashless option exercise |
|
| 26,584 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
Net loss |
|
| - |
|
|
| - |
|
|
| (818,598 | ) |
|
| (33,651 | ) |
|
| (852,249 | ) |
Balance June 30, 2022 |
|
| 11,985,747 |
|
|
| 32,133,342 |
|
|
| (17,107,155 | ) |
|
| 2,861,913 |
|
|
| 17,888,100 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contribution from non-controlling interest in New Jersey Mill Joint Venture |
|
| - |
|
|
| - |
|
|
| - |
|
|
| 1,682 |
|
|
| 1,682 |
|
Issuance of common stock for warrants exercised |
|
| 100,893 |
|
|
| 565,005 |
|
|
| - |
|
|
| - |
|
|
| 565,005 |
|
Options issued to management, directors, and employees |
|
| - |
|
|
| 547,275 |
|
|
| - |
|
|
| - |
|
|
| 547,275 |
|
Issuance of common stock for cashless option exercise |
|
| 11,430 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
Net loss |
|
| - |
|
|
| - |
|
|
| (1,894,419 | ) |
|
| (15,005 | ) |
|
| (1,909,424 | ) |
Balance September 30, 2022 |
|
| 12,098,070 |
|
| $ | 33,245,622 |
|
| $ | (19,001,574 | ) |
| $ | 2,848,590 |
|
| $ | 17,092,638 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance January 1, 2023 |
|
| 12,098,070 |
|
| $ | 33,245,622 |
|
| $ | (18,368,384 | ) |
| $ | 2,835,832 |
|
| $ | 17,713,070 |
|
Contribution from non-controlling interest in New Jersey Mill Joint Venture |
|
| - |
|
|
| - |
|
|
| - |
|
|
| 1,601 |
|
|
| 1,601 |
|
Issuance of common stock for cash, net of offering costs |
|
| 158,453 |
|
|
| 878,503 |
|
|
| - |
|
|
| - |
|
|
| 878,503 |
|
Net income (loss) |
|
| - |
|
|
| - |
|
|
| 60,599 |
|
|
| (16,413 | ) |
|
| 44,186 |
|
Balance March 31, 2023 |
|
| 12,256,523 |
|
|
| 34,124,125 |
|
|
| (18,307,785 | ) |
|
| 2,821,020 |
|
|
| 18,637,360 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contribution from non-controlling interest in New Jersey Mill Joint Venture |
|
| - |
|
|
| - |
|
|
| - |
|
|
| 16,409 |
|
|
| 16,409 |
|
Net income (loss) |
|
| - |
|
|
| - |
|
|
| 327,793 |
|
|
| (31,971 | ) |
|
| 295,822 |
|
Balance June 30, 2023 |
|
| 12,256,523 |
|
|
| 34,124,125 |
|
|
| (17,979,992 | ) |
|
| 2,805,458 |
|
|
| 18,949,591 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contribution from non-controlling interest in New Jersey Mill Joint Venture |
|
| - |
|
|
| - |
|
|
| - |
|
|
| 1,637 |
|
|
| 1,637 |
|
Net income (loss) |
|
| - |
|
|
| - |
|
|
| 420,679 |
|
|
| (16,696 | ) |
|
| 403,983 |
|
Balance September 30, 2023 |
|
| 12,256,523 |
|
| $ | 34,124,125 |
|
| $ | (17,559,313 | ) |
| $ | 2,790,399 |
|
| $ | 19,355,211 |
|
Idaho Strategic Resources, Inc.
Condensed Consolidated Statement of Changes in Stockholders' Equity (Unaudited)
For the Three-Month Periods Ended March 31, 2024 and 2023
|
| Common Stock Shares |
|
| Common Stock Amount |
|
| Accumulated Deficit Attributable to Idaho Strategic Resources, Inc |
|
| Non-Controlling Interest |
|
| Stockholders’ Equity |
| |||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Balance January 1, 2023 |
|
| 12,098,070 |
|
| $ | 33,245,622 |
|
| $ | (18,368,384 | ) |
| $ | 2,835,832 |
|
| $ | 17,713,070 |
|
Contribution from non-controlling interest in New Jersey Mill Joint Venture |
|
| - |
|
|
| - |
|
|
| - |
|
|
| 1,601 |
|
|
| 1,601 |
|
Issuance of common stock for cash, net of offering costs |
|
| 158,453 |
|
|
| 878,503 |
|
|
| - |
|
|
| - |
|
|
| 878,503 |
|
Net income (loss) |
|
| - |
|
|
| - |
|
|
| 60,599 |
|
|
| (16,413 | ) |
|
| 44,186 |
|
Balance March 31, 2023 |
|
| 12,256,523 |
|
| $ | 34,124,125 |
|
| $ | (18,307,785 | ) |
| $ | 2,821,020 |
|
| $ | 18,637,360 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance January 1, 2024 |
|
| 12,397,615 |
|
| $ | 34,963,739 |
|
| $ | (17,210,638 | ) |
| $ | 2,782,497 |
|
| $ | 20,535,598 |
|
Contribution from non-controlling interest in New Jersey Mill Joint Venture |
|
| - |
|
|
| - |
|
|
| - |
|
|
| 1,598 |
|
|
| 1,598 |
|
Issuance of common stock for cash, net of offering costs |
|
| 127,152 |
|
|
| 847,492 |
|
|
| - |
|
|
| - |
|
|
| 847,492 |
|
Issuance of common stock for warrants exercised |
|
| 147,026 |
|
|
| 823,346 |
|
|
| - |
|
|
| - |
|
|
| 823,346 |
|
Issuance of common stock for stock options exercise |
|
| 5,357 |
|
|
| 29,999 |
|
|
| - |
|
|
| - |
|
|
| 29,999 |
|
Issuance of common stock for cashless stock options exercise |
|
| 5,887 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
Net income (loss) |
|
| - |
|
|
| - |
|
|
| 2,171,109 |
|
|
| (15,295 | ) |
|
| 2,155,814 |
|
Balance March 31, 2024 |
|
| 12,683,037 |
|
| $ | 36,664,576 |
|
| $ | (15,039,529 | ) |
| $ | 2,768,800 |
|
| $ | 24,393,847 |
|
The accompanying notes are an integral part of these condensed consolidated financial statements.
5 |
Table of Contents |
Idaho Strategic Resources, Inc. Condensed Consolidated Statements of Cash Flows (Unaudited) For the Nine-Month Periods Ended September 30, 2023 and 2022 | ||||||||
|
| September 30, |
| |||||
|
| 2023 |
|
| 2022 |
| ||
Cash flows from operating activities: |
|
|
|
|
|
| ||
Net income (loss) |
| $ | 743,991 |
|
| $ | (3,234,742 | ) |
Adjustments to reconcile net income (loss) to net cash provided (used) by operating activities: |
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
| 1,034,521 |
|
|
| 717,939 |
|
Loss (gain) on disposal of equipment |
|
| (224 | ) |
|
| 68,641 |
|
Accretion of asset retirement obligation |
|
| 11,874 |
|
|
| 11,342 |
|
Stock based compensation |
|
| - |
|
|
| 547,275 |
|
Issuance of common stock for services |
|
| - |
|
|
| 32,326 |
|
Gain on forgiveness of SBA loan |
|
| - |
|
|
| (10,000 | ) |
Loss on investment in equity securities |
|
| 4,423 |
|
|
| - |
|
Equity income on investment in Buckskin |
|
| (2,965 | ) |
|
| (1,213 | ) |
Change in operating assets and liabilities: |
|
|
|
|
|
|
|
|
Gold sales receivable |
|
| (217,607 | ) |
|
| (20,568 | ) |
Inventories |
|
| (83,180 | ) |
|
| (394,200 | ) |
Joint venture receivable |
|
| 289 |
|
|
| 2,760 |
|
Other current assets |
|
| (141,434 | ) |
|
| 78,568 |
|
Accounts payable and accrued expenses |
|
| (81,167 | ) |
|
| 169,590 |
|
Accrued payroll and related payroll expenses |
|
| 74,547 |
|
|
| 25,127 |
|
Net cash provided (used) by operating activities |
|
| 1,343,068 |
|
|
| (2,007,155 | ) |
|
|
|
|
|
|
|
|
|
Cash flows from investing activities: |
|
|
|
|
|
|
|
|
Purchases of property, plant, and equipment |
|
| (467,655 | ) |
|
| (1,145,186 | ) |
Deposits on equipment |
|
| (25,000 | ) |
|
| (31,584 | ) |
Proceeds from sale of equipment |
|
| 8,500 |
|
|
| - |
|
Purchase of reclamation bonds |
|
| - |
|
|
| (222,800 | ) |
Refund of reclamation bonds |
|
| 75,710 |
|
|
| - |
|
Additions to mineral property |
|
| (645,962 | ) |
|
| (451,012 | ) |
Purchase of equity securities |
|
| (11,100 | ) |
|
| - |
|
Net cash used by investing activities |
|
| (1,065,507 | ) |
|
| (1,787,414 | ) |
|
|
|
|
|
|
|
|
|
Cash flows from financing activities: |
|
|
|
|
|
|
|
|
Proceeds from sale of common stock, net of issuance cost |
|
| 878,503 |
|
|
| 3,681,107 |
|
Proceeds from exercise of common stock warrants |
|
| - |
|
|
| 1,030,158 |
|
Principal payments on notes payable |
|
| (766,714 | ) |
|
| (629,322 | ) |
Principal payments on notes payable, related parties |
|
| (75,183 | ) |
|
| (30,916 | ) |
Contributions from non-controlling interest |
|
| 19,647 |
|
|
| 22,712 |
|
Net cash provided by financing activities |
|
| 56,253 |
|
|
| 4,073,739 |
|
|
|
|
|
|
|
|
|
|
Net change in cash and cash equivalents |
|
| 333,814 |
|
|
| 279,170 |
|
Cash and cash equivalents, beginning of period |
|
| 1,638,031 |
|
|
| 1,976,518 |
|
Cash and cash equivalents, end of period |
| $ | 1,971,845 |
|
| $ | 2,255,688 |
|
|
|
|
|
|
|
|
|
|
Non-cash investing and financing activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deposit on equipment applied to purchase |
| $ | 76,110 |
|
| $ | 96,000 |
|
Notes payable for equipment and land purchase |
| $ | 1,110,737 |
|
| $ | 1,189,056 |
|
Conversion of convertible debt to common stock |
| $ | - |
|
| $ | 1,950,000 |
|
Idaho Strategic Resources, Inc.
Condensed Consolidated Statements of Cash Flows (Unaudited)
For the Three-Month Periods Ended March 31, 2024 and 2023
|
| March 31, |
| |||||
|
| 2024 |
|
| 2023 |
| ||
Cash flows from operating activities: |
|
|
|
|
|
| ||
Net income |
| $ | 2,155,814 |
|
| $ | 44,186 |
|
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
| 501,788 |
|
|
| 328,037 |
|
Loss on disposal of equipment |
|
| 4,409 |
|
|
| 6,120 |
|
Accretion of asset retirement obligation |
|
| 4,575 |
|
|
| 3,899 |
|
Loss on investment in equity securities |
|
| 453 |
|
|
| - |
|
Equity income on investment in Buckskin Gold and Silver, Inc |
|
| (1,867 | ) |
|
| (350 | ) |
Change in operating assets and liabilities: |
|
|
|
|
|
|
|
|
Gold sales receivable |
|
| (199,607 | ) |
|
| (432,393 | ) |
Inventories |
|
| 79,845 |
|
|
| 72,669 |
|
Joint venture receivable |
|
| 482 |
|
|
| (1,601 | ) |
Other current assets |
|
| 27,013 |
|
|
| 11,856 |
|
Accounts payable and accrued expenses |
|
| 1,142 |
|
|
| 64,565 |
|
Accrued payroll and related payroll expenses |
|
| 5,806 |
|
|
| 63,774 |
|
Net cash provided by operating activities |
|
| 2,579,853 |
|
|
| 160,762 |
|
|
|
|
|
|
|
|
|
|
Cash flows from investing activities: |
|
|
|
|
|
|
|
|
Purchases of property, plant, and equipment |
|
| (322,596 | ) |
|
| (129,249 | ) |
Deposits on equipment |
|
| (123,060 | ) |
|
| - |
|
Proceeds from sale of equipment |
|
| - |
|
|
| 8,500 |
|
Additions to mineral property |
|
| (564,355 | ) |
|
| (284,272 | ) |
Proceeds from sale of investment in equity securities |
|
| 5,196 |
|
|
| - |
|
Investment in equity securities |
|
| - |
|
|
| (11,100 | ) |
Net cash used by investing activities |
|
| (1,004,815 | ) |
|
| (416,121 | ) |
|
|
|
|
|
|
|
|
|
Cash flows from financing activities: |
|
|
|
|
|
|
|
|
Proceeds from sale of common stock, net of issuance cost |
|
| 847,492 |
|
|
| 878,503 |
|
Proceeds from issuance of common stock for warrants exercised |
|
| 823,346 |
|
|
| - |
|
Proceeds from issuance of common stock for stock options exercised |
|
| 29,999 |
|
|
| - |
|
Principal payments on notes payable |
|
| (269,015 | ) |
|
| (238,354 | ) |
Principal payments on notes payable, related parties |
|
| - |
|
|
| (10,618 | ) |
Contributions from non-controlling interest |
|
| 1,598 |
|
|
| 1,601 |
|
Net cash provided by financing activities |
|
| 1,433,420 |
|
|
| 631,132 |
|
|
|
|
|
|
|
|
|
|
Net change in cash and cash equivalents |
|
| 3,008,458 |
|
|
| 375,773 |
|
Cash and cash equivalents, beginning of period |
|
| 2,286,999 |
|
|
| 1,638,031 |
|
Cash and cash equivalents, end of period |
| $ | 5,295,457 |
|
| $ | 2,013,804 |
|
|
|
|
|
|
|
|
|
|
Non-cash investing and financing activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deposit on equipment applied to purchase |
| $ | 30,719 |
|
| $ | 42,610 |
|
Notes payable for equipment purchase |
| $ | 559,752 |
|
|
| - |
|
Notes payable for mineral property purchase |
| $ | 650,000 |
|
|
| - |
|
The accompanying notes are an integral part of these condensed consolidated financial statements.
6 |
Table of Contents |
Idaho Strategic Resources, Inc
Notes to Condensed Consolidated Financial Statements (Unaudited)
1. The Company and Significant Accounting Policies
These unaudited interim condensed consolidated financial statements have been prepared by the management of Idaho Strategic Resources, IncInc. (“IDR”) (the, “Idaho Strategic” or the “Company”) in accordance with accounting principles generally accepted in the United States of America for interim financial information. Accordingly, they do not include all the information and footnotes required by generally accepted accounting principles for complete consolidated financial statements. In the opinion of the Company’s management, all adjustments (consisting of only normal recurring accruals) considered necessary for a fair statement of the interim condensed consolidated financial statements have been included.
The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities known to exist as of the date the financial statements are published, and the reported amounts of revenues and expenses during the reporting period. Uncertainties with respect to such estimates and assumptions are inherent in the preparation of the Company's consolidated financial statements; accordingly, it is possible that the actual results could differ from these estimates and assumptions, which could have a material effect on the reported amounts of the Company's consolidated financial position and results of operations. Operating results for the three and nine-monththree-month periods ended September 30, 2023,March 31, 2024, are not necessarily indicative of the results that may be expected for the full year ending December 31, 2023.2024.
For further information refer to the financial statements and footnotes thereto in the Company’s audited consolidated financial statements for the year ended December 31, 2022,2023, in the Company’s Form 10-K as filed with the Securities and Exchange Commission on March 31, 2023.25, 2024.
Principles of Consolidation
The condensed consolidated financial statements include the accounts of the Company and its majority-owned subsidiary, the New Jersey Mill Joint Venture (“NJMJV”). Intercompany accounts and transactions are eliminated. The portion of entities owned by other investors is presented as non-controlling interests on the consolidated balance sheets and statements of operations.
Revenue Recognition
Gold Revenue Recognition and Receivables-Sales of gold sold directly to customers are recorded as revenues and receivables upon completion of the performance obligations and transfer of control of the product to the customer. For concentrate sales, the performance obligation is met, the transaction price can be reasonably estimated, and revenue is recognized generally at the time of shipment at estimated forward prices for the anticipated month of settlement. Due to the time elapsed from shipment to the customer and the final settlement with the customer, prices at which sales of concentrates will be settled are estimated. Previously recorded sales and accounts receivable are adjusted to estimated settlement metals prices until final settlement by the customer. For sales of doré and metals from doré, the performance obligation is met, the transaction price is known, and revenue is recognized at the time of transfer of control of the agreed-upon metal quantities to the customer by the refiner.
Sales and accounts receivable for concentrate shipments are recorded net of charges by the customer for treatment, refining, smelting losses, and other charges negotiated with the customers. Charges are estimated upon shipment of concentrates based on contractual terms, and actual charges typically do not vary materially from estimates. Costs charged by customers include fixed costs per ton of concentrate and price escalators. Refining, selling, and shipping costs related to sales of doré and metals from doré are recorded to cost of sales as incurred. See Note 4 for more information on our sales of products.
Other Revenue Recognition-Revenue from harvest of raw timber is recognized when the performance obligation under a contract and transfer of the timber have both been completed. Sales of timber found on the Company’s mineral properties are not a part of normal operations.
Inventories
Inventories are stated at the lower of full cost of production or estimated net realizable value based on current metal prices. Costs consist of mining, transportation, and milling costs including applicable overhead, depreciation, depletion, and amortization relating to the operations. Costs are allocated based on the stage at which the ore is in the production process. Supplies inventory is stated at the lower of cost or estimated net realizable value.
Mine Exploration and Development Costs
The Company expenses exploration costs as such in the period they occur. The mine development stage begins once the Company identifies ore reserves which is based on a determination whether an ore body can be economically developed. Expenditures incurred during the development stage are capitalized as deferred development costs and include such costs for drift, ramps, raises, and related infrastructure. Costs to improve, alter, or rehabilitate primary development assets which appreciably extend the life, increase capacity, or improve the efficiency or safety of such assets are also capitalized. The development stage ends when the production stage of ore reserves begins. Amortization of deferred development costs is calculated using the units-of-production method over the expected life of the operation based on the estimated recoverable mineral ounces.
Fair Value Measurements
When required to measure assets or liabilities at fair value, the Company uses a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used. The Company determines the level within the fair value hierarchy in which the fair value measurements in their entirety fall. The categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Level 1 uses quoted prices in active markets for identical assets or liabilities, Level 2 uses significant other observable inputs, and Level 3 uses significant unobservable inputs. The amount of the total gains or losses for the period that are included in earnings are attributable to the change in unrealized gains or losses relating to those assets and liabilities still held at the reporting date. At September 30,December 31, 2023, the Company had equity securities measured at fair value using level 1 quoted prices and no liabilities required measurement at fair value. At DecemberMarch 31, 2022,2024, the Company had no assets or liabilities that required measurement at fair value on a recurring basis.
7 |
Table of Contents |
Idaho Strategic Resources, Inc
Notes to Condensed Consolidated Financial Statements (Unaudited)
1. The Company and Significant Accounting Policies (continued)
Accounting for Investments in Joint Ventures (“JV”) and Equity Method Investments
Investment in Joint VenturesJVs-For joint venturesJVs where the Company holds more than 50% of the voting interest and has significant influence, the joint ventureJV is consolidated with the presentation of non-controlling interest. In determining whether significant influence exists, the Company considers its participation in policy-making decisions and its representation on the venture’s management committee.
For joint venturesJVs in which the Company does not have joint control or significant influence, the cost method is used. For those joint venturesJVs in which there is joint control between the parties, the equity method is utilized whereby the Company’s share of the ventures’ earnings and losses is included in the statement of operations as earnings in joint venturesJVs and its investments therein are adjusted by a similar amount. The Company periodically assesses its investments in joint venturesJVs for impairment. If management determines that a decline in fair value is other than temporary it will write-down the investment and charge the impairment against operations.
Equity Method Investments-Investments in companies and joint ventures in which the Company has the ability to exercise significant influence, but do not control, are accounted for under the equity method of accounting. In determining whether significant influence exists, the Company considers its participation in policy-making decisions and representation on governing bodies. Under the equity method of accounting, our share of the net earnings or losses of the investee are included in net income (loss) in the consolidated statements of operations. We evaluate equity method investments whenever events or changes in circumstance indicate the carrying amounts of such investments may be impaired. If a decline in the value of an equity method investment is determined to be other than temporary, a loss is recorded in earnings in the current period. At September 30, 2023,March 31, 2024, and December 31, 2022,2023, the Company's 37% common stock holding of Buckskin Gold and Silver, Inc. (“Buckskin”) is accounted for using the equity method (Note 10).
At September 30, 2023March 31, 2024 and December 31, 2022,2023, the Company’s percentage ownership and method of accounting for each joint ventureJV and equity method investment is as follows:
| September 30, 2023 | December 31, 2022 | ||||
Joint Venture | % Ownership | Significant Influence? | Accounting Method | % Ownership | Significant Influence? | Accounting Method |
NJMJV | 65% | Yes | Consolidated | 65% | Yes | Consolidated |
Butte Highlands Joint Venture (“BHJV”) | 50% | No | Cost | 50% | No | Cost |
Buckskin Gold and Silver Inc. | 37% | Yes | Equity | 37% | Yes | Equity |
|
| March 31, 2024 |
| December 31, 2023 | |||||||||||||
JV/Equity |
| % Ownership |
|
| Significant Influence? |
| Accounting Method |
| % Ownership |
|
| Significant Influence? |
| Accounting Method | |||
NJMJV |
|
| 65 | % |
| Yes |
| Consolidated |
|
| 65 | % |
| Yes |
| Consolidated | |
Butte Highlands JV, LLC |
|
| 50 | % |
| No |
| Cost |
|
| 50 | % |
| No |
| Cost | |
Buckskin |
|
| 37 | % |
| Yes |
| Equity |
|
| 37 | % |
| Yes |
| Equity |
Reclassifications
Certain prior period amounts have been reclassified to conform to the 20232024 financial statement presentation. Reclassifications had no effect on net loss, stockholders’ equity, or cash flows as previously reported.
Investments in Equity Securities
Investments in equity securities are generally measured at fair value. Unrealized gains and losses for equity securities resulting from changes in fair value are recognized in current earnings. If an equity security does not have a readily determinable fair value, we may elect to measure the security at its cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for an identical or similar investment in the same issuer. At the end of each reporting period, we reassess whether an equity investment security without a readily determinable fair value qualifies to be measured at cost less impairment, consider whether impairment indicators exist to evaluate if an equity investment security is impaired and, if so, record an impairment loss. At the end of each reporting period, unrealized gains and losses resulting from changes in fair value are recognized in current earnings. Upon sale of an equity security, the realized gain or loss is recognized in current earnings.
New Accounting Pronouncement
Accounting standards that have been issued or proposed byIn August 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-05, Business Combinations-Joint Venture Formations (Subtopic 805-60): Recognition and Initial Measurement, which clarifies the business combination accounting for joint venture formations. The amendments in the ASU seek to reduce diversity in practice that has resulted from a lack of authoritative guidance regarding the accounting for the formation of joint ventures in separate financial statements. The amendments also seek to clarify the initial measurement of joint venture net assets, including businesses contributed to a joint venture. The guidance is applicable to all entities involved in the formation of a joint venture. The amendments are effective for all joint venture formations with a formation date on or after January 1, 2025. Early adoption and retrospective application of the amendments are permitted. We do not requireexpect adoption until a future date are not expectedof the new guidance to have a material impact on theour consolidated financial statements upon adoption.and disclosures.
In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, amending reportable segment disclosure requirements to include disclosure of incremental segment information on an annual and interim basis. Among the disclosure enhancements are new disclosures regarding significant segment expenses that are regularly provided to the chief operating decision-maker and included within each reported measure of segment profit or loss, as well as other segment items bridging segment revenue to each reported measure of segment profit or loss. The Companyamendments in ASU 2023-07 are effective for fiscal years beginning after December 15, 2023, and for interim periods within fiscal years beginning after December 15, 2024, and are applied retrospectively. Early adoption is permitted. We are currently evaluating the impact of this update on our consolidated financial statements and disclosures.
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvement to Income Tax Disclosures, amending income tax disclosure requirements for the effective tax rate reconciliation and income taxes paid. The amendments in ASU 2023-09 are effective for fiscal years beginning after December 15, 2024 and are applied prospectively. Early adoption and retrospective application of the amendments are permitted. We are currently evaluating the impact of this update on our consolidated financial statements and disclosures.
Management does not discuss recent pronouncementsbelieve that areany other recently issued, but not anticipated toyet effective, accounting standards if currently adopted would have an impacta material effect on or are unrelated to itsthe accompanying financial condition, results of operations, cash flows or disclosures.statements.
2. Going Concern
The Company is currently producing profitably from underground mining at the Golden Chest Mine. In the past, the Company has been successful in raising required capital from sale of common stock, forward gold contracts, and debt. As a result of its plannedprofitable production, equity sales and potential debt borrowings or restructurings, management believes cash flows from operations and existing cash are sufficient to conduct planned operations and meet contractual obligations for the next 12 months.
3. Inventories
At September 30, 2023 and December 31, 2022, the Company’s inventories consisted of the following:
|
| September 30, 2023 |
|
| December 31, 2022 |
| ||
Concentrate inventory |
|
|
|
|
|
| ||
In process |
| $ | 157,284 |
|
| $ | 111,741 |
|
Finished goods |
|
| 44,185 |
|
|
| 111,574 |
|
Total concentrate inventory |
|
| 201,469 |
|
|
| 223,315 |
|
|
|
|
|
|
|
|
|
|
Supplies inventory |
|
|
|
|
|
|
|
|
Mine parts and supplies |
|
| 278,875 |
|
|
| 233,465 |
|
Mill parts and supplies |
|
| 143,579 |
|
|
| 83,963 |
|
Core drilling supplies and materials |
|
| 77,570 |
|
|
| 77,570 |
|
Total supplies inventory |
|
| 500,024 |
|
|
| 394,998 |
|
|
|
|
|
|
|
|
|
|
Total |
| $ | 701,493 |
|
| $ | 618,313 |
|
8 |
Table of Contents |
Idaho Strategic Resources, Inc
Notes to Condensed Consolidated Financial Statements (Unaudited)
3. Inventories
At March 31, 2024 and December 31, 2023, the Company’s inventories consisted of the following:
|
| March 31, 2024 |
|
| December 31, 2023 |
| ||
Concentrate inventory |
|
|
|
|
|
| ||
In process |
| $ | 110,526 |
|
| $ | 28,778 |
|
Finished goods |
|
| 31,784 |
|
|
| 239,361 |
|
Total concentrate inventory |
|
| 142,310 |
|
|
| 268,139 |
|
|
|
|
|
|
|
|
|
|
Supplies inventory |
|
|
|
|
|
|
|
|
Mine parts and supplies |
|
| 440,881 |
|
|
| 374,456 |
|
Mill parts and supplies |
|
| 137,961 |
|
|
| 158,402 |
|
Core drilling supplies and materials |
|
| 75,684 |
|
|
| 75,684 |
|
Total supplies inventory |
|
| 654,526 |
|
|
| 608,542 |
|
|
|
|
|
|
|
|
|
|
Total |
| $ | 796,836 |
|
| $ | 876,681 |
|
4. Sales of Products
Our products consist of both gold flotation concentrates which we sell to a single broker (H&H Metals), and an unrefined gold-silver product known as doré which we sell to a precious metal refinery. At September 30, 2023,March 31, 2024, metals that had been sold but not finally settled included 6,5125,737 ounces of which 4,1824,421 ounces were sold at a predetermined price with the remaining 2,3301,316 exposed to future price changes. The Company has received provisional payments on the sale of these ounces with the remaining amount due reflected in gold sales receivable. Sales of products by metal type for the three and nine-monththree-month periods ended September 30,March 31, 2024 and 2023 and 2022 were as follows:
|
| September 30, 2023 |
| September 30, 2022 |
|
| March 31, |
| ||||||||||||||||
|
| Three Months |
|
| Nine Months |
|
| Three Months |
|
| Nine Months |
|
| 2024 |
|
| 2023 |
| ||||||
Gold |
| $ | 3,458,174 |
| $ | 10,347,001 |
| $ | 1,890,626 |
| $ | 6,620,745 |
|
| $ | 6,121,129 |
| $ | 3,484,034 |
| ||||
Silver |
| 14,283 |
| 37,630 |
| 3,034 |
| 9,992 |
|
| 24,245 |
| 9,522 |
| ||||||||||
Less: Smelter and refining charges |
|
| (171,236 | ) |
|
| (505,299 | ) |
|
| (148,382 | ) |
|
| (482,550 | ) |
|
| (246,436 | ) |
|
| (151,960 | ) |
Total |
| $ | 3,301,221 |
|
| $ | 9,879,332 |
|
| $ | 1,745,278 |
|
| $ | 6,148,187 |
|
| $ | 5,898,938 |
|
| $ | 3,341,596 |
|
Sales by significant product type for the three and nine-monththree-month periods ended June 30,March 31, 2024, and 2023 and 2022 were as follows:
|
| September 30, 2023 |
| September 30, 2022 |
|
| March 31, |
| ||||||||||||||||
|
| Three Months |
|
| Nine Months |
|
| Three Months |
|
| Nine Months |
|
| 2024 |
|
| 2023 |
| ||||||
Concentrate sales to H&H Metals |
| $ | 3,301,221 |
| $ | 9,741,227 |
| $ | 1,745,278 |
| $ | 5,844,571 |
| |||||||||||
Concentrate sales to H&H Metal |
| $ | 5,898,938 |
| $ | 3,203,491 |
| |||||||||||||||||
Dore sales to refinery |
|
| - |
|
|
| 138,105 |
|
|
| - |
|
|
| 303,616 |
|
|
| - |
|
|
| 138,105 |
|
Total |
| $ | 3,301,221 |
|
| $ | 9,879,332 |
|
| $ | 1,745,278 |
|
| $ | 6,148,187 |
|
| $ | 5,898,938 |
|
| $ | 3,341,596 |
|
At September 30, 2023March 31, 2024 and December 31, 2022,2023, our gold sales receivable balance related to contracts with customers of $1,127,604$1,238,474 and $909,997,$1,038,867, respectively, consist only of amounts due from H&H Metals. There is no allowance for doubtful accounts.
5. Related Party Transactions
At March 31, 2024 and December 31, 2022,2023, there were no notes payable to related parties. On May 10, 2023, the Company had a note payablepaid the remaining amount due to Ophir Holdings, a company owned by two officers and one former officer of the Company, withCompany. Prior to this payment, there was a balance of $75,183 of which $12,226 was due within one year and the remaining $62,957 due thereafter.
The Company paid the remaining amount due to Ophir Holdings on May 10, 2023. This payment resulted in a negative net interest charge for the nine-months ended September 30, 2023. Relatedrelated party interest expense forof $715 during the three and nine-monthsthree-month period ended September 30,March 31, 2023 and 2022 is as follows.associated with this note.
September 30, 2023 |
|
| September 30, 2022 |
| ||||||||||
Three Months |
|
| Nine Months |
|
| Three Months |
|
| Nine Months |
| ||||
$ | - |
|
| $ | (2,676 | ) |
| $ | 924 |
|
| $ | 3,081 |
|
The Company leases office space from certain related parties on a month-to-month basis. $1,500$2,000 per month is paid to NP Depot LLC, a company owned by the Company’s president, John Swallow and approximately $1,700 is paid quarterly to Mine Systems Design Inc which is partially owned by the Company’s vice president, Grant Brackebusch. Payments under these short-term lease arrangements are included in general and administrative expenses on the Consolidated Statement of Operations and for the threethree-months ended March 31, 2024 and nine-months ended September 30, 2023 and 2022 are as follows:
September 30, 2023 |
|
| September 30, 2022 |
| ||||||||||
Three Months |
|
| Nine Months |
|
| Three Months |
|
| Nine Months |
| ||||
$ | 6,120 |
|
| $ | 18,555 |
|
| $ | 6,217 |
|
| $ | 18,651 |
|
March 31, | ||||||
2024 |
|
| 2023 |
| ||
$ | 7,620 |
|
| $ | 6,395 |
|
6. Joint VenturesJV Arrangements
New Jersey Mill Joint VentureNJMJV Agreement
The Company owns 65% of the New Jersey Mill Joint Venture (JV)NJMJV and has significant influence in its operations. Thus, the ventureJV is included in the consolidated financial statements along with presentation of the non-controlling interest. At September 30, 2023March 31, 2024 and December 31, 2022,2023, an account receivable existed with Crescent Silver, LLC the other joint venture participant (“Crescent”), the other JV participant, for $1,637$1,598 and $1,926,$2,080, respectively, for shared operating costs as defined in the JV agreement.
Butte Highlands JV, LLC (“BHJV”)
On January 29, 2016, the Company purchased a 50% interest in Butte Highlands JV, LLC (“BHJV”) for a total consideration of $435,000. Highland Mining, LLC (“Highland”) is the other 50% owner and manager of the joint venture.JV. Under the agreement, Highland will fund all future project exploration and mine development costs. The agreement stipulates that Highland is manager of BHJV and will manage BHJV until such time as all mine development costs, less $2 million are distributed to Highland out of the proceeds from future mine production. The Company has determined that because it does not currently have significant influence over the joint venture’sJV’s activities, it accounts for its investment on a cost basis.
9 |
Table of Contents |
Idaho Strategic Resources, Inc
Notes to Condensed Consolidated Financial Statements (Unaudited)
7. Earnings per Share
Net income (loss) per share is computed by dividing the net amount excluding net income (loss) attributable to a non-controlling interest by the weighted average number of common shares outstanding during the period. Diluted net income (loss) per share reflects the potential dilution that could occur from common shares issuable through stock options, warrants, and other convertible securities. Such common stock equivalents are included or excluded from the calculation of diluted net income (loss) per share for each period as follows:
|
| September 30, 2023 |
| September 30, 2022 |
|
| March 31, 2024 |
| March 31, 2023 |
| ||||||||||||||
|
| Three Months |
|
| Nine Months |
|
| Three Months |
|
| Nine Months |
|
| Three-Months |
|
| Three-Months |
| ||||||
Incremental shares included in diluted net income (loss) per share |
|
|
|
|
|
|
|
|
| |||||||||||||||
Incremental shares included in diluted net income per share |
|
|
|
|
| |||||||||||||||||||
Stock options |
| 6,795 |
| 4,883 |
| - |
| - |
|
| 109,243 |
| 4,710 |
| ||||||||||
Stock purchase warrants |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 50,555 |
|
|
| - |
|
|
|
| 6,795 |
|
|
| 4,883 |
|
|
| - |
|
|
| - |
|
|
| 159,798 |
|
|
| 4,710 |
|
Potentially dilutive shares excluded from diluted net income (loss) per share as inclusion would have an antidilutive effect: |
|
|
|
|
|
|
|
|
| |||||||||||||||
Potentially dilutive shares excluded from diluted net income per share as inclusion would have an antidilutive effect: |
|
|
|
|
| |||||||||||||||||||
Stock options |
| 321,449 |
| 321,449 |
| 542,525 |
| 542,525 |
|
| - |
| 358,953 |
| ||||||||||
Stock purchase warrants |
|
| 289,294 |
|
|
| 289,294 |
|
|
| 289,294 |
|
|
| 289,294 |
|
|
| - |
|
|
| 289,294 |
|
|
|
| 610,743 |
|
|
| 610,743 |
|
|
| 831,819 |
|
|
| 831,819 |
|
|
| - |
|
|
| 825,247 |
|
8. Property, Plant, and Equipment
Property, plant and equipment at September 30, 2023March 31, 2024 and December 31, 20222023 consisted of the following:
|
| September 30, 2023 |
|
| December 31, 2022 |
|
| March 31, 2024 |
|
| December 31, 2023 |
| ||||
Mill |
|
|
|
|
|
|
|
|
|
| ||||||
Land |
| $ | 225,289 |
| $ | 225,289 |
|
| $ | 225,289 |
| $ | 225,289 |
| ||
Building |
| 536,193 |
| 536,193 |
|
| 536,193 |
| 536,193 |
| ||||||
Equipment |
|
| 4,192,940 |
|
|
| 4,192,940 |
|
|
| 4,192,940 |
|
|
| 4,192,940 |
|
|
| 4,954,422 |
| 4,954,422 |
|
| 4,954,422 |
| 4,954,422 |
| ||||||
Less accumulated depreciation |
|
| (1,381,865 | ) |
|
| (1,249,445 | ) |
|
| (1,481,546 | ) |
|
| (1,430,323 | ) |
Total mill |
|
| 3,572,557 |
|
|
| 3,704,977 |
|
|
| 3,472,876 |
|
|
| 3,524,099 |
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Building and equipment |
|
|
|
|
|
|
|
|
|
| ||||||
Buildings |
| 611,382 |
| 611,382 |
|
| 624,657 |
| 624,657 |
| ||||||
Equipment |
|
| 8,535,801 |
|
|
| 6,927,474 |
|
|
| 9,667,536 |
|
|
| 8,786,492 |
|
|
| 9,147,183 |
| 7,538,856 |
|
| 10,292,193 |
| 9,411,149 |
| ||||||
Less accumulated depreciation |
|
| (3,169,450 | ) |
|
| (2,324,679 | ) |
|
| (3,852,811 | ) |
|
| (3,455,023 | ) |
Total building and equipment |
|
| 5,977,733 |
|
|
| 5,214,177 |
|
|
| 6,439,382 |
|
|
| 5,956,126 |
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Land |
|
|
|
|
|
|
|
|
|
| ||||||
Bear Creek |
| 266,934 |
| 266,934 |
|
| 266,934 |
| 266,934 |
| ||||||
BOW |
| 230,449 |
| 230,449 |
|
| 230,449 |
| 230,449 |
| ||||||
Eastern Star |
| 250,817 |
| 250,817 |
| |||||||||||
Gillig |
| 79,137 |
| 79,137 |
|
| 79,137 |
| 79,137 |
| ||||||
Highwater |
| 40,133 |
| 40,133 |
|
| 40,133 |
| 40,133 |
| ||||||
Salmon property |
|
| 136,762 |
|
|
| 136,762 |
|
|
| 136,762 |
|
|
| 136,762 |
|
Total land |
|
| 1,004,232 |
|
|
| 1,004,232 |
|
| 753,415 |
| 753,415 |
| |||
|
|
|
|
|
| |||||||||||
Total |
| $ | 10,554,522 |
|
| $ | 9,923,386 |
|
| $ | 10,665,673 |
|
| $ | 10,233,640 |
|
9. Mineral Properties
Mineral properties at September 30, 2023March 31, 2024 and December 31, 20222023 consisted of the following:
|
| September 30, 2023 |
|
| December 31, 2022 |
|
| March 31, 2024 |
|
| December 31, 2023 |
| ||||
Golden Chest |
|
|
|
|
|
|
|
|
|
| ||||||
Mineral Property |
| $ | 4,141,904 |
| $ | 4,088,462 |
|
| $ | 4,210,566 |
| $ | 4,191,189 |
| ||
Infrastructure |
|
| 2,314,548 |
|
|
| 1,722,028 |
|
|
| 3,007,937 |
|
|
| 2,814,164 |
|
Total Golden Chest |
| 6,456,452 |
| 5,810,490 |
|
| 7,218,503 |
| 7,005,353 |
| ||||||
New Jersey |
| 248,289 |
| 248,289 |
|
| 256,768 |
| 256,768 |
| ||||||
McKinley-Monarch |
| 200,000 |
| 200,000 |
|
| 200,000 |
| 200,000 |
| ||||||
Butte Gulch |
| 124,055 |
| 124,055 |
|
| 1,125,259 |
| 124,055 |
| ||||||
Potosi |
| 150,385 |
| 150,385 |
|
| 150,385 |
| 150,385 |
| ||||||
Park Copper |
| 78,000 |
| 78,000 |
| |||||||||||
Park Copper/Gold |
| 78,000 |
| 78,000 |
| |||||||||||
Eastern Star |
|
| 250,817 |
|
|
| 250,817 |
| ||||||||
Less accumulated amortization |
|
| (103,089 | ) |
|
| (83,658 | ) |
|
| (191,662 | ) |
|
| (166,500 | ) |
Total |
| $ | 7,154,092 |
|
| $ | 6,527,561 |
|
| $ | 9,088,070 |
|
| $ | 7,898,878 |
|
In February 2024 the Company purchased the surface rights and subsequently cancelled the NSR from the previous agreement with the seller for a 169-acre parcel known as Butte Gulch adjacent to the Golden Chest. The Company had already owned the mineral rights to this property. The sale price was $1,001,000 of which $351,000 was paid in cash and the remaining $650,000 is payable to the seller (monthly interest only payments of $2,750 at 5% interest, for three years with a balloon payment of $650,000 at the end of the term). For the three-month periods ended March 31, 2024 and 2023, interest expense was capitalized in association with the ramp access project at the Golden Chest as follows.
March 31, 2024 |
| March 31, 2023 | ||
$ | 19,377 |
| $ | 22,961 |
10. Investment in Buckskin
The investment in Buckskin is being accounted for using the equity method and resulted in recognition of equity income on the investment of $1,867 and $350 for the respective three-month periods ended March 31, 2024 and 2023. The Company makes an annual payment of $12,000 to Buckskin per a mineral lease covering 218 acres of patented mining claims. As of March 31, 2024, the Company holds 37% of Buckskin’s outstanding shares.
10 |
Table of Contents |
Idaho Strategic Resources, Inc
Notes to Condensed Consolidated Financial Statements (Unaudited)
9. Mineral Properties (continued)
For the three and nine-month periods ended September 30, 2023 and 2022, interest expense was capitalized in association with the ramp access project at the Golden Chest as follows.
September 30, 2023 |
|
| September 30, 2022 |
| ||||||||||
Three Months |
|
| Nine Months |
|
| Three Months |
|
| Nine Months |
| ||||
$ | 11,107 |
|
| $ | 53,442 |
|
| $ | 11,180 |
|
| $ | 32,097 |
|
10. Investment in Buckskin
The investment in Buckskin is being accounted for using the equity method and resulted in recognition of equity income on the investment of $1,608 and $2,965 for the respective three and nine-month periods ended September 30, 2023, and $542 and $1,213 in 2022 for the respective three and nine-month periods ended September 30, 2022. The Company makes an annual payment of $12,000 to Buckskin per a mineral lease covering 218 acres of patented mining claims. As of September 30, 2023, the Company holds 37% of Buckskin’s outstanding shares.
11. Notes Payable
At September 30, 2023March 31, 2024 and December 31, 2022,2023, notes payable are as follows:
|
| September 30, 2023 |
|
| December 31, 2022 |
|
| March 31, 2024 |
|
| December 31, 2023 |
| ||||
Building in Salmon, Idaho, 60-month note payable, 7.00% interest payable monthly through June 2027, monthly payments of $2,500 with a balloon payment of $260,886 in July 2027 |
| $ | 299,502 |
| $ | 306,084 |
|
| $ | 294,918 |
| $ | 297,230 |
| ||
Butte Gulch vacant mineral property, 5.00% interest payable monthly through January 2027, monthly interest only payments of $2,750 with a balloon payment of $650,000 in February 2027 |
| 650,000 |
| - |
| |||||||||||
Resemin Muki Bolter, 36-month note payable, 7.00% interest payable monthly through January 2025, monthly payments of $14,821 |
| 227,279 |
| 345,268 |
|
| 145,118 |
| 186,557 |
| ||||||
Paus 2 yrd. LHD, 48-month note payable, 4.78% interest rate payable through September 2024, monthly payments of $5,181 |
| 65,492 |
| 108,904 |
| |||||||||||
Paus 2 yrd. LHD, 60-month note payable, 3.45% interest rate payable through July 2024, monthly payments of $4,847 |
| 47,711 |
| 89,493 |
| |||||||||||
Paus 2 yd LHD, 60-month note payable, 4.78% interest rate payable through September 2024, monthly payments of $5,181 |
| 35,675 |
| 50,672 |
| |||||||||||
Paus 2 yd LHD, 60-month note payable, 3.45% interest rate payable through July 2024, monthly payments of $4,847 |
| 19,249 |
| 33,541 |
| |||||||||||
CarryAll transport, 36-month note payable, 4.5% interest rate payable monthly through February 2024, monthly payments of $303 |
| - |
| 604 |
| |||||||||||
CarryAll transport, 36-month note payable, 4.5% interest rate payable monthly through June 2024, monthly payments of $627 |
| 5,537 |
| 10,891 |
|
| 1,867 |
| 3,713 |
| ||||||
CarryAll transport, 36-month note payable, 4.5% interest rate payable monthly through February 2024, monthly payments of $303 |
| 1,501 |
| 4,130 |
| |||||||||||
Two CarryAll transports, 36-month note payable, 6.3% interest rate payable monthly through May 2025, monthly payments of $1,515 |
| 28,710 |
| 40,687 |
|
| 20,408 |
| 24,591 |
| ||||||
CarryAll transport, 36-month note payable, 6.3% interest rate payable monthly through June 2025, monthly payments of $866 |
| 17,183 |
| 23,987 |
|
| 12,466 |
| 14,843 |
| ||||||
Two CarryAll transports, 48-month note payable, 5.9% interest rate payable monthly through June 2027, monthly payments of $1,174 |
| 47,284 |
| - |
|
| 41,566 |
| 44,447 |
| ||||||
Atlas Copco loader, 60-month note payable, 10.5% interest rate payable monthly through June 2023, monthly payments of $3,550 |
| - |
| 20,660 |
| |||||||||||
CarryAll transport, 48-month note payable, 5.9% interest rate payable monthly through April 2028, monthly payments of $576 |
| 24,554 |
| - |
| |||||||||||
Sandvik LH203 LHD, 36-month note payable, 4.5% interest payable monthly through May 2024, monthly payments of $10,352 |
| 105,994 |
| 170,182 |
|
| 20,588 |
| 51,182 |
| ||||||
Sandvik LH202 LHD, 36-month note payable, 6.9% interest payable monthly through August 2025, monthly payments of $4,933 |
| 81,435 |
| 143,812 |
|
| 79,676 |
| 92,948 |
| ||||||
Doosan Compressor, 36-month note payable, 6.99% interest payable monthly through July 2024, monthly payments of $602 |
| 5,844 |
| 10,820 |
|
| 2,378 |
| 4,126 |
| ||||||
Komatsu WX04 LHD, 24-month note payable, 8.24% interest rate payable monthly through April 2026, monthly payments of $16,642 |
| 367,068 |
| - |
| |||||||||||
Caterpillar 306 excavator, 48-month note payable, 4.6% interest payable monthly through November 2024, monthly payments of $1,512 |
| 20,565 |
| 33,216 |
|
| 11,886 |
| 16,251 |
| ||||||
Caterpillar 938 loader, 60-month note payable, 6.8% interest rate payable monthly through August 2023, monthly payments of $3,751 |
| - |
| 29,256 |
| |||||||||||
Caterpillar R1600 LHD, 48-month note payable, 4.5% interest rate payable through January 2025, monthly payments of $17,125 |
| 265,446 |
| 407,909 |
|
| 167,765 |
| 216,880 |
| ||||||
Caterpillar AD22 underground truck, 48-month note payable, 6.45% interest rate payable through June 2023, monthly payments of $12,979 |
| - |
| 76,287 |
| |||||||||||
Caterpillar R1600 LHD bucket, 24-month note payable, 2.06% interest rate payable monthly through April 2026, monthly payments of $4,572 |
| 107,415 |
| - |
| |||||||||||
Caterpillar AD30 underground truck, 40-month note payable, 8.01% interest rate payable through October 2026, monthly payments of $29,656 |
| 969,440 |
| - |
|
| 827,982 |
| 899,417 |
| ||||||
Small Business Administration EIDL 30 year note payable, 3.75% interest payable monthly through December 2054, monthly payments of $731 |
| 160,899 |
| 163,287 |
| |||||||||||
Caterpillar 259D3 skid steer, 36-month note payable, 8.50% interest rate payable monthly through December 2026, monthly payments of $1,836 |
| 53,854 |
| 58,156 |
| |||||||||||
SBA Economic Injury Disaster (“EIDL”) Loan 30 year note payable, 3.75% interest payable monthly through December 2054, monthly payments of $731 |
| 158,835 |
| 160,123 |
| |||||||||||
2022 Dodge Ram, 75-month note payable, 5.99% interest rate payable monthly through June 2028, monthly payments of $1,152 |
| 57,033 |
| 64,648 |
|
| 51,763 |
| 54,418 |
| ||||||
2016 Dodge Ram, 75-month note payable, 5.99% interest rate payable monthly through June 2028, monthly payments of $1,190 |
| 58,895 |
| 66,758 |
|
| 53,453 |
| 56,194 |
| ||||||
2020 Ford Transit Van, 72-month note payable, 9.24% interest rate payable monthly through December 2028, monthly payments of $1,060 |
|
| 52,734 |
|
|
| 58,182 |
|
| 48,739 |
| 50,759 |
| |||
2024 Dodge Ram, 60-month note payable, 9.94% interest rate payable monthly through February 2029, monthly payments of $1,293 |
|
| 60,166 |
|
|
| - |
| ||||||||
Total notes payable |
| 2,518,484 |
| 2,174,461 |
|
| 3,257,389 |
| 2,316,652 |
| ||||||
Due within one year |
|
| 1,007,101 |
|
|
| 859,393 |
|
|
| 1,090,329 |
|
|
| 978,246 |
|
Due after one year |
| $ | 1,511,383 |
|
| $ | 1,315,068 |
|
| $ | 2,167,060 |
|
| $ | 1,338,406 |
|
All notes except the SBA EIDL loan are collateralized by the property or equipment purchased in connection with each note. Future principal payments of notes payable at September 30, 2023March 31, 2024 are as follows:
12 months ended September 30, |
|
|
| |||||
2024 |
| $ | 1,007,101 |
| ||||
12 months ended March 31, |
|
|
| |||||
2025 |
| 577,853 |
|
| $ | 1,090,329 |
| |
2026 |
| 399,778 |
|
| 695,133 |
| ||
2027 |
| 349,131 |
|
| 966,287 |
| ||
2028 |
| 35,624 |
|
| 328,681 |
| ||
2029 |
| 6,490 |
|
| 33,583 |
| ||
2030 |
| 3,454 |
| |||||
Thereafter |
|
| 142,507 |
|
|
| 139,922 |
|
Total |
| $ | 2,518,484 |
|
| $ | 3,257,389 |
|
11 |
Table of Contents |
Idaho Strategic Resources, Inc
Notes to Condensed Consolidated Financial Statements (Unaudited)
12. Stockholders’ Equity
Stock issuance activityIssuance Activity
In the first quarter of 2024, the Company issued common stock as follows:
· | Sold 127,152 shares of common stock at an average price of $6.67 per share for $847,492. | |
· | Issued 147,026 shares of common stock in exchange for outstanding warrants for $823,346. | |
· | Issued 5,357 shares of common stock in exchange for outstanding stock options for $29,999, | |
· | Issued 5,887 shares of common stock for outstanding stock options via cashless exercise. |
The Company closed a private placement in February 2023. Under the private placement, the Company sold 123,365 shares of common stock at $5.50 per share and 35,088 shares of common stock at $5.70 per share for net proceeds of $878,503. No shares were issued in the second or third quarter of 2023.
The Company closed a private placement in February 2022. Under the private placement, the Company sold 360,134 shares of common stock at $7.50 per share for net proceeds of $2,701,000. In the nine-months ended September 30, 2022, the Company sold 138,665 shares of common stock for net proceeds of $980,107. In the nine-months ended September 30, 2022 the Company issued 3,572 shares of common stock at $9.05 per share for services provided for a total value of $32,326. Also, in the nine-months ended September 30, 2022, the Company issued 392,866 shares of the Company’s common stock in exchange for $1,950,000 of debt at $4.96 per share.
Stock Purchase Warrants Outstanding
In the nine-months ended September 30, 2022, 194,869 shares of common stock were issued in exchange for outstanding warrants for net proceeds of $1,030,158.
|
|
| |||||
|
| ||||||
|
| ||||||
|
| ||||||
|
|
These warrants expire as follows: |
| Shares |
|
| Exercise Price |
|
| Expiration Date | |||
|
|
| 235,722 |
|
| $ | 5.60 |
|
| October 15, 2023 | |
|
|
| 53,572 |
|
| $ | 7.00 |
|
| November 12, 2023 | |
|
|
| 289,294 |
|
|
|
|
|
|
|
These outstanding warrants were amended and extended on October 12, 2023, see note 14.
The activity in stock purchase warrants is as follows: |
| Number of Warrants |
|
| Exercise Prices |
| ||
Balance December 31, 2022 and 2023 |
|
| 289,294 |
|
| $ | 5.60-7.00 |
|
Exercised |
|
| (147,026 | ) |
| $ | 5.60 |
|
Balance March 31, 2024 |
|
| 142,268 |
|
| $ | 5.60-7.00 |
|
These warrants expire as follows: |
| Shares |
|
| Exercise Price |
|
| Expiration Date | |||
|
|
| 88,696 |
|
| $ | 5.60 |
|
| October 15, 2024 | |
|
|
| 53,572 |
|
| $ | 7.00 |
|
| November 12, 2024 | |
|
|
| 142,268 |
|
|
|
|
|
|
|
13. Stock Options
There were no stock options granted during the nine-monthsthree-months ended September 30,March 31, 2024 and 2023. In September 2022, the board granted 165,000 stock options to officers, board members, and employees. These options vested immediately and are exercisable at $5.25 for 3 years. Total stock-based compensation recognized on these options was $505,476 and was recognized in management, professional services, and general administrative expenses in the statement of operations. In September 2022, the board granted an additional 15,000 total stock options, 7,500 each to our independent board members. These options vested immediately and are exercisable at $4.75 for 3 years. Total stock-based compensation recognized on these options was $41,799 and was recognized in management expenses in the statement of operations.
Activity in the Company’s stock options is as follows:
|
| Number of Options |
|
| Weighted Average Exercise Prices |
|
| Number of Options |
|
| Weighted Average Exercise Prices |
| ||||
Balance December 31, 2021 |
| 507,175 |
| $ | 5.25 |
| ||||||||||
Granted |
| 180,000 |
| $ | 5.21 |
| ||||||||||
Exercised |
| (116,078 | ) |
| $ | 4.31 |
| |||||||||
Expired |
| (7,143 | ) |
| $ | 1.96 |
| |||||||||
Forfeited |
|
| (28,001 | ) |
| $ | 5.56 |
| ||||||||
Balance December 31, 2022 |
| 535,953 |
| $ | 5.47 |
|
| 535,953 |
| $ | 5.47 |
| ||||
Forfeited |
|
| (58,504 | ) |
| $ | 5.47 |
|
|
| (58,504 | ) |
| $ | 5.47 |
|
Outstanding and exercisable at September 30, 2023 |
|
| 477,449 |
|
| $ | 5.47 |
| ||||||||
Balance December 31, 2023 |
| 477,449 |
| $ | 5.47 |
| ||||||||||
Exercised |
| (22,073 | ) |
| $ | 5.50 |
| |||||||||
Forfeited |
|
| (10,144 | ) |
| $ | 5.50 |
| ||||||||
Outstanding and exercisable at March 31, 2024 |
|
| 445,232 |
|
| $ | 5.47 |
|
In the first quarter of 2024 16,716 options were exchanged for 5,887 shares in a cashless exercise by employees. Options exercised in the first quarter of 2024 had an intrinsic value of $65,229. At September 30, 2023,March 31, 2024, outstanding stock options have a weighted average remaining term of approximately 1.070.85 years and have an intrinsic value of $4,350. There were no stock options exercised during the first nine months of 2023$1,332,314.
14. Subsequent Events
On October 12, 2023, IDR amended and restated warrants issued in private placements completed in October and November of 2021. The amended and restated warrants extended the exercise period of the warrants for an additional one year.
The October 2021 private placement issued warrants gave the holders the rightSubsequent to purchase a total of 235,722March 31, 2024, 29,763 shares of common stock at anhave been issued in exchange for outstanding warrants for net proceeds of $166,673. Additionally, subsequent to March 31, 2024 69,861 options were exchanged for 27,562 shares in a cashless exercise price of $5.60 per share. The expiration date of the warrants was extended from October 15, 2023 to October 15, 2024. The November 2021 private placement issued warrants gave the holders the right to purchase a total of 53,572 shares of common stock at an exercise price of $7.00 per share. The expiration date of the warrants was extended from November 12, 2023 to November 12, 2024. There were no other changes in the terms of the warrants.by employees.
12 |
Table of Contents |
Forward-Looking Statements
Certain statements contained in this Form 10-Q, including in Management’s Discussion and Analysis of Financial Condition and Results of Operations and Quantitative and Qualitative Disclosures About Market Risk, are intended to be covered by the safe harbor provided for under Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Our forward-looking statements include our current expectations and projections about future results, performance, results of litigation, prospects and opportunities, including reserves and other mineralization. We have tried to identify these forward-looking statements by using words such as “may,” “will,” “expect,” “anticipate,” “believe,” “intend,” “feel,” “plan,” “estimate,” “project,” “forecast” and similar expressions. These forward-looking statements are based on information currently available to us and are expressed in good faith and believed to have a reasonable basis. However, our forward-looking statements are subject to a number of risks, uncertainties and other factors that could cause our actual results, performance, prospects or opportunities to differ materially from those expressed in, or implied by, these forward-looking statements.
These risks, uncertainties and other factors include, but are not limited to, those set forth under Part I, Item 1A.–Risk Factors in our 2023 Form 10-K and in Part II, Item 1.A.-Risk Factors in this Form 10-Q. Given these risks and uncertainties, readers are cautioned not to place undue reliance on our forward-looking statements. All subsequent written and oral forward-looking statements attributable to Idaho Strategic or to persons acting on our behalf are expressly qualified in their entirety by these cautionary statements. Except as required by federal securities laws, we do not intend to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
ITEM 2: MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Plan of Operation
Idaho Strategic Resources, Inc is a gold producer and critical minerals/rare earth elementselement (“REE”) exploration company focused on a diversified asset base and cash flows from operations. Its portfolio of mineral properties are located in the historic producing silver and gold districts of the Coeur d’Alene Mining region of north Idaho and the Elk City region of north-central Idaho, as well as the historic Rare Earth Elements-ThoriumREE-Thorium Belt located near the city of Salmon in central Idaho.
The Company’s plan of operation is to generate positive cash flow, increase its gold production and asset base over time while being mindful of corporate overhead. The Company’s management is focused on utilizing its in-house technical and operating skills to build a portfolio of producing mines and milling operations with a focus on gold production and exploration for rare earth elements (“REEs”).REEs.
The Company’s gold properties include: the Golden Chest Mine (currently in production), and the New Jersey Mill (majority ownership interest), as well as the Eastern Star exploration property and other less advanced properties. The Company’s primary focus as it relates to its gold properties is to continue to grow production at the Golden Chest Mine and look to reinvest the cash flow into both the Golden Chest, Mine, the New Jersey Mill, and furthering its exploration efforts near the Golden Chest, - as well as at its rare earth elementsREE properties.
In addition to its gold properties, Idaho Strategic has three rare earth elementsREE exploration properties in Idaho known as Lemhi Pass, Diamond Creek, and Mineral Hill. TheFollowing observation of industry dynamics and in early response to events impacting long-term domestic critical mineral supply and demand trends, the Company’s strategic expansion into rare earth elements came aboutREE’s also aids in an effort to diversifydiversifying its holdings towardsholdings. The Company believes the anticipated demand for these elements in the electrification of motorized vehicles, defense spending, and a renewed focus on the United States’ domestic critical minerals supply chain security.security may benefit domestic holders of such assets. The Company also believes it has a first-mover advantage with its addition of recognized REE land holdings in Idaho. To date, Idaho Strategic has conducted numerous exploration programs on its rare earth elements landholdingsREE properties which include drilling, trenching, sampling, and mapping of certain areas within the Company’s 18,030-acre19,090-acre landholdings.
Idaho Strategic has been able to leveragedemonstrate and utilize its track record of operations and experience in mining, milling, and exploring at the Golden Chest Mine to develop relationships with different state government agencies, universities, national labs, and other government and non-government entities to advance its rare earth elementsREE exploration activities on multiple fronts. Idaho Strategic plans to continue to look for additional partnerships to find mutually beneficial solutions to advance the U.S.' domestic rare earth elementsREE supply chain.
Critical Accounting Estimates
We have, besides our estimates of the amount of depreciation on our assets, two critical accounting estimates. The ounces of gold contained in our process and concentrate inventory is based on assays taken at the time the ore is processed and the ounces of gold contained in shipped concentrate which is based upon assays taken prior to shipment however subject to final assays at the refinery, these shipments are also subject to the fluctuation in gold prices between our shipment date and estimated and actual final settlement date. Also, the reclamation bond obligation on our balance sheet is based on an estimate of the future cost to recover and remediate our properties as required by our permits upon cessation of our operations and may differ when we cease operations.
Our concentrate sales sometimes involve variable consideration, as they can be subject to changes in metals prices between the time of shipment and their final settlement. However, we are able tocan reasonably estimate the transaction price for the concentrate sales at the time of shipment using forward prices for the estimated month of settlement, and previously recorded sales and accounts receivable are adjusted to estimated settlement metals prices until final settlement for financial reporting purposes. The embedded derivative contained in our concentrate sales is adjusted to fair value through earnings each period prior to final settlement. It is unlikely a significant reversal of revenue for the concentrate receivable as a whole will occur upon final settlement of the lots. As such, we use the expected value method to price the concentrate until the final settlement date occurs, at which time the final transaction price is known. At September 30, 2023,March 31, 2024, metals that had been sold but not finally settled included 6,5125,737 ounces of which 4,1824,421 ounces were sold at a predetermined price with the remaining 2,3301,316 exposed to future price changes. The Company has received provisional payments on the sale of these ounces with the remaining amount due reflected in gold sales receivable.
The asset retirement obligation and asset on our balance sheet is based on an estimate of the future cost to recover and remediate our properties as required by our permits upon cessation of our operations and may differ when we cease operations. At September 30, 2023March 31, 2024 we reviewed our December 31, 20222023 estimate that the cost of the machine and man hours probable to be needed to put our properties in the condition required by our permits once we cease operations. The September 30, 2023March 31, 2024 estimated costs would be $103,320$104,000 for the Golden Chest property and $203,600$224,000 for the New Jersey Mine and Mill. For purposes of the estimate, we evaluated the expected life in years and costs that, initially, are comparable to rates that we would incur at the present. An expected present value technique is used to estimate the fair value of the liability. This includes inflating the estimated costs in today’s dollars using a reasonable inflation rate up to the date of expected retirement and discounting the inflated costs using a credit-adjusted risk-free rate. Upon initial recognition of the liability, the carrying amount of the related long-lived asset is increased by the same amount. The liability is accreted over time through periodic charges to earnings. In addition, the asset retirement cost is amortized over the life of the related asset. We are adding to the liability each year, and amortizing the asset over the estimated life, which decreases our net income in total each year. Changes resulting from revisions to the timing or amount of the original estimate of undiscounted cash flows are recognized as either an increase or a decrease in the carrying amount of the liability for an asset retirement obligation and the related asset retirement cost capitalized as part of the carrying amount of the related long-lived asset. Upward revisions of the amount of undiscounted estimated cash flows are discounted using the current credit-adjusted risk-free rate. Downward revisions in the amount of undiscounted estimated cash flows are discounted using the credit-adjusted risk-free rate that existed when the original liability was recognized. The Company reviews, on an annual basis, unless otherwise deemed necessary, the asset retirement obligations. Separately, the Company accrues costs associated with environmental remediation obligations when it is probable that such costs will be incurred and they areable to be reasonably estimable.estimated.
Highlights during the third quarter of 2023 include:
Rare Earth Elements
|
|
13 |
Table of Contents |
Highlights during the first quarter of 2024 include:
|
|
| |
Exploration | |||
| · |
|
| Golden Chest/Operations | ||
| · |
|
Golden Chest/Operations
| At the Golden Chest, ore mined from underground stopes totaled approximately | |
· | A total of | |
| · |
|
| For the quarter ended |
Results of Operations
Our financial performance during the quarter is summarized below:
Cash Costs and Reconciliation of cost of sales and other direct production costs and depreciation, depletion, and amortization
The table below presents reconciliations between the most comparable GAAP measure of cost of sales and other direct production costs and depreciation, depletion, and amortization to the non-GAAP measures of cash cost per ounce and all in sustaining costs per ounce for the Company’s gold production in the
Cash cost per ounce is an important operating measure that we utilize to measure operating performance. AISC per ounce is an important measure that we utilize to assess net cash flow after costs for pre-development, exploration, reclamation, and sustaining capital. Current GAAP measures used in the mining industry, such as cost of goods sold do not capture all of the expenditures incurred to discover, develop, and sustain gold production.
Financial Condition and Liquidity
The Company is currently producing profitably from
ITEM 3: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Not required for small reporting companies.
ITEM 4: CONTROLS AND PROCEDURES
Disclosure Controls and Procedures At
Based upon that evaluation, it was concluded that our disclosure controls were effective as of
Changes in internal control over financial reporting There was no material change in internal control over financial reporting in the quarter ended
PART II - OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS
None.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
Neither the constituent instruments defining the rights of the Company’s securities filers nor the rights evidenced by the Company’s outstanding common stock have been modified, limited or qualified.
147,026 shares of common stock were issued in exchange for outstanding warrants for net proceeds of $823,346. 5,357 shares of common stock were issued in exchange for outstanding stock options for net proceeds of $29,999 and 5,887 shares of common stock were issued for outstanding stock options via cashless exercise. The Company closed a private placement in February 2023. Under the private placement, the Company sold 123,365 shares at $5.50 per share and 35,088 shares at $5.70 per share for net proceeds of $878,503.
The Company relied on the transaction exemption afforded by Section 4(a)(2) of the Securities Act of 1933, as amended, and Regulation D Rule 506(b). The common shares are restricted securities which may not be publicly sold unless registered for resale with the Securities and Exchange Commission or exempt from the registration requirements of the Securities Act of 1933, as amended.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
The Company has no outstanding senior securities.
ITEM 4. MINE SAFETY DISCLOSURES
The information concerning mine safety violations or other regulatory matters required by Section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 104 of Regulation S-K is included in exhibit 95 to this report.
ITEM 5. OTHER INFORMATION
None.
ITEM 6. EXHIBITS
Exhibits
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
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